February 8, 2023

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U.S. Stocks Remain Firmly Negative After Early Pullback

2 min read

After coming under pressure early in the session, stocks continue to see significant weakness in afternoon trading on Friday. With the pullback on the day, the major averages have partly offset the rally seen in the previous session.

Currently, the major averages are off their worst levels of the day but still firmly negative. The Dow is down 242.70 points or 0.7 percent at 33,005.58, the Nasdaq is down 274.23 points or 2.2 percent at 12,042.67 and the S&P 500 is down 56.57 points or 1.4 percent at 4,120.25.

Traders have cashed in on yesterday’s strong gains, as stronger than expected jobs data has offset the faint hopes that the Federal Reserve might slow its planned pace of interest rate hikes.

The Labor Department’s closely watched monthly employment report showed job growth in the U.S. exceeded economist estimates in the month of May.

The report showed non-farm payroll employment jumped by 390,000 jobs in May after surging by an upwardly revised 436,000 jobs in April.

Economists had expected employment to increase by about 325,000 jobs compared to the addition of 428,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate remained unchanged at 3.6 percent. The unemployment rate was expected to edge down to 3.5 percent.

The report also showed average hourly earnings rose by $0.10 or 0.3 percent to $31.95 in May. The annual rate of wage growth slowed to 5.2 percent in May from 5.5 percent in April.

“The May employment report underscores Chairman Powell’s view of the labor market still being extraordinarily tight despite some moderation in wage growth,” said Kathy Bostjancic, Chief U.S. Economist at Oxford Economics.

She added, “As such, today’s report supports the Fed raising the fed funds rate by 50bps at each of its June and July meetings.”

A separate report from the Institute for Supply Management showed growth in U.S. service sector activity slowed by slightly more than expected in the month of May.

The ISM…

2022-06-03 13:21:24

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